Based purely on demographics—the average advisor is 55 years old and nearing retirement—newer advisors might assume merely surviving the next ten years or so would make the world their oyster. And, really, that is correct.

Don’t worry about future investors not needing advisors – that won’t happen. The bulk of investors will continue to rely upon trusted advice.

Need evidence? Vanguard’s founder John Bogle cited an internal study that showed the lag DIY investors suffer from performance chasing with their mutual funds was exacerbated when using ETFs. Yes, the potential returns offered by ETFs were higher than the aggregate actively-invested dollar, but without the stewardship of an advisor to reign in emotions, the DIY ETF investors didn’t even come close to actually earning those returns.

There are very few people who doubt that no matter what type of compensation structure an advisor chooses he or she is a salesperson at heart. But philosophical debates about payment structures are moot if you don’t have clients. What’s the point in being a competent and talented financial advisor if no one’s ever heard of you?

Acknowledging your role as a salesperson doesn’t preclude you from being ethical—and it could mean the difference between survival and failure. To prove the point, I’ve gathered some war stories from some masters of practice management: men and women who are both great financial advisors and slick salespeople.

Nail down the 3 processes

The single most prevelant trait of every successful advisor is having processes in place. And there are three you need to master:

  • 1. Finding clients;
  • 2. Closing clients; and
  • 3. Maintaining clients.

A good advisor will have two of the three perfected. A great advisor will nail all three.

Finding clients

I’ll assume you know all about the three tried and true methods of prospecting that don’t seem to work for you – seminars, mail-drops and cold-calling. These methods have their place in a business based on finding clients and assets, but consider some alternative arrows for your quiver:

  • Ask senior advisors in your office if they have any assets they can do without. Sounds forward, but you’d be surprised how easily some advisors will let go of clients they haven’t actively been in touch with. Chances are they aren’t generating revenue from them, but they might be happy to split part of the future revenues from those clients for a certain period of time in exchange for downloading the maintenance and compliance to someone who has more time.
  • Ask your branch manager for access to house accounts. These are the clients who no longer have an advisor because that person left or was axed. If there is competition for house accounts, then get creative. Tell your branch manager you only want five leads to start with, and every time you secure new revenue from one of those leads you’ll get access to another lead (or two). Maybe the clients have an insurance need. Or, maybe you’ll hit the jackpot and find a client who has assets at another institution that isn’t servicing him properly and will move the money over.
  • Buy assets. Since the average advisor is closer to retirement than you, many have succession planning on their minds. Lots of advisors like to pare down their client bases before really pulling the plug, and they’re keenly aware that 20% of their clients generate 80% of their revenue. Start planting the seed with advisors from whom you’re actively looking to buy books, or portions of books. Some firms can even help you finance the purchase, or you can go and get a loan from your bank.
  • Referrals. Yes, we all know the stats on this one. Most clients give referrals, and most advisors don’t ask for them; or ask timidly by putting something in their email signature like, “Referrals are the best complement!” Really? That’s your referral pitch? Ditch it. Instead, try the “one-shot, one-kill” approach. Pick out your top clients. Then, one by one, call the workplace and tell the receptionist you want to plan a surprise for your client. Ask her to put you in touch with one or two of your client’s friends at the office and get them to clear the client’s lunch on a particular day. Take them all out to lunch. Chances are you just earned two new meetings. They’ll wonder why their advisor doesn’t go the extra mile, and chances are they have similar financial needs as your existing client.

Closing clients

You’re sitting in front of a hot prospect. How do you keep them hot enough to begin a relationship with you? Start by proving to them that they need you—need, not want. The best way to show them that is by investing time into making recommendations on the spot, or producing an elaborate financial plan. You should have a list of about 10 questions designed to highlight just how exposed their finances are to catastrophe. Here’s a sample:

  • If you and your partner get into an accident today and you die, and your partner survives but is mentally incapacitated, how you have planned for that?

This one question opens up a discussion to wills, powers of attorney, life insurance and guardian designations. But instead of talking about these options, simply put down a big fat “X” beside the words Estate Plan. Find a similarly direct, open-ended question for each of the categories of financial planning. You can simply put down a check mark or an “X” beside each of the pillars of financial planning. The prospect will be curious as to why they might be failing this first meeting, and this lets you explain your value proposition: that you look after all the areas of financial planning starting with disaster proofing.

Before you end this short meeting, have the next one booked. But don’t fall into the trap of booking meeting number two without highlighting its significance. Explain that this is the juncture where people can make it or break it. Tell them: “I don’t want you to book this next meeting unless you are serious, and if you cancel the meeting that’s fine, I just want your word now that if I call to reschedule it, you’ll reschedule it and we will sit down to start the process.” You’ve either just closed the prospect or saved hours of your time by warding off the tire kickers. Don’t be afraid to lay down the law.

Maintaining clients

The final process will become more important down the road. Long-term client retention starts as soon as the prospect signs the paperwork for a new account. It not only includes managing the client’s expectations, but also making sure you run a squeaky-clean, compliant practice. Here are some best practices:

  • Schedule your annual reviews for one week before your clients’ birthdays. Give them a small gift certificate to their favourite coffee shop, or other small gift. You’ll never forget another birthday for a client again because you know you’ll be meeting around that date. They may also be more likely to mention your name to friends and family.
  • Take notes as if you’re writing a book. You’ll know you’re doing a good job if your assistant or associate is able to execute all the actionable items that need completing without having spoken to you after your meetings. Send a copy of your notes to your client as a follow-up to your meeting, always asking them if there were any items missed or misinterpreted. You are now almost litigation-proof.
  • Have all your clients’ e-mail addresses compiled on an e-mail service like MailChimp – free for lists with fewer than 500 subscribers – and whenever you sign up a new client, have them register for your e-mail list. And, learn to use auto-responders, which send out automated e-mails at specific times for each individual user. For example, you can set up your auto-responders to send out a “welcome to the practice” email one week after anyone signs up. Another auto-responder could be set up to send an e-mail one month after a user signs up to explain how to read their new statements. You can even set up unlimited auto-responders that will automatically send out personalized e-mails to new clients on a periodic basis (If you have your investment management philosophy written out, you could turn it into a 10-part series of emails). Using auto-responders with an e-mail service will ensure all new clients get the 10-part series on a monthly basis, thus understanding you better and getting consistent contact from you without taking up any of your time. Lastly, whenever there’s breaking news, you can quickly send out an e-mail to everyone on your list without having to worry about whether you used CC instead of BCC.

All said and done, hard work is always your best bet, but it doesn’t hurt to be creative. Happy hunting.


  • Preet Banerjee is the senior vice-president at Pro-Financial Asset Management.